Moscow Leapfrogs London on Rents

MOSCOW-This city has supplanted London as the second most expensive office location in Europe, but the new Moscow ranking only surpasses the overall London rents; London’s West End retains the top spot in new research by Oncor International and NB Real Estate. The NB report shows that Moscow “has leapfrogged the City of London to become the second most expensiveoffice location in Europe after rents there rocketed 46.2% in one year,” the NB survey states. Rents in Moscow have reached 1,025.9 euros per square meter per year, according to research by NB Real Estate and Oncor.

At the peak of its growth, the City of London rents reached 890 euros per square meter peryear. The West End of London remains the most expensive office district in Europe as rents rose 22.7% to hit 1,758.6 euros per square meterr per year. According to NB Real Estate, “Rental inflation in the Moscow office market is to a significant extent being driven by the Russian commodities boom, whereas London is much more dependent on the financial services sector, which has reduced its demand for space as a result of the credit crunch.”

James Gillett, director of City Agency at NB Real Estate points out that this is the firsttime office rents in Moscow have surpassed those in London, and “is illustrative of how Russiahas become a European economic powerhouse in recent years.” Many financial institutions in London have scaled back their requirements for new office space as a result of the credit crisis, and rents appear on their way to declining in London, he says.